AI Lowers Costs of Games, Sony & Microsoft To Profit
AI tools could reduce the costs to create high-definition games by up to 15%, and Morgan Stanley revealed that large businesses and gaming platforms, such as Microsoft’s Xbox and Sony’s PlayStation, will be “the most clear-cut beneficiaries of AI adoption in the game industry.”
Other smaller businesses will not reap the benefits as clearly as platform companies, which could be shielded from risks of disruption posed by artificial intelligence.
Analysts also believe Unity Software, Roblox, and Tencent Holdings will also fare well while smaller creators might suffer.
The gaming business is costly, and with AI, the industry has the chance to streamline and make games for less money.
But just how disruptive will AI be to the gaming industry? Morgan Stanely says it will be a complete transformation.
“New AI tools look set to change how games are made,” the Morgan Stanley analysts wrote.
Publishers will see the effects soon, and despite tech now reducing the cost of creating and operating top-tier “AAA” games by roughly 15%, Morgan Stanley analysts predicted they will also feel the pressure of more competition.
Morgan Stanley says larger AAA game publishers can expect a hypothetical 10% earnings lift from reduced costs.
It’s basically a “clear AI bull case”, the analysts from the global financial services company asserted.
According to the report, smaller publishers such as Playtika may suffer the most from lower barriers to entry, which will benefit the more prominent players.